WeWork seeks SPAC deal after recording $3.2bn loss in 2020

The company's losses narrowed from $3.5bn in 2019, according to an investor presentation

(FILES) This file photo taken on March 13, 2014 shows a man entering the doors of the "WeWork" co-operative co-working space in Washington, DC. 
Office-sharing startup WeWork on November 28, 2017 announced a deal to buy Meetup, an online social network devoted to organizing real-world activities based on common interests.Financial terms of the deal were not disclosed, but news website Axios cited a source as saying it was valued at about $200 million. New York-based Meetup has grown to 35 million members since it launched in June of 2002, according to WeWork.

WeWork lost $3.2 billion last year, the office-sharing start-up disclosed in a presentation shown to prospective investors as part of a pitch for $1bn in investment and a stock market listing, according to a source.

The company's losses narrowed from $3.5bn in 2019 and it plans to go public at a valuation of $9bn including debt through a merger with a special purpose acquisition company (SPAC), the sources said.

A SPAC is a shell company that raises funds in an IPO with the aim of acquiring a private company, which then becomes public as result of the merger.

Reuters reported in January that WeWork was in talks to go public through a merger with a SPAC and was exploring raising funds from private investors.

The company's plans for a high-profile initial public offering imploded in October 2019 due to widespread criticism over its business model and its founder Adam Neumann's management style. SoftBank Group later bailed out the start-up.

WeWork is now in talks with BowX Acquisition Corporation, a blank-check company that raised $420 million in August, according to the Financial Times, which first reported the news.

WeWork declined to comment on the report.

The report said that WeWork forecast occupancy to rebound to 90 per cent by the end of 2022, from 47 per cent at the end of last year when the Covid-19 pandemic shut its co-working spaces around the world.

The company expects adjusted earnings before interest, taxes, depreciation and amortization of $485m next year, the report added.